This graph shows U.S. dollars in circulation per capita—in other words, how much physical cash is held outside the Federal Reserve for each person living in the U.S. As of the November 2018 observation, that amount is $6,575. We checked, and no one on the FRED Blog team is holding that much cash right now. We assume not many of our readers would hold that much cash. So, who is holding it? Part of it may be lost. Much of it is held by domestic businesses and governments. And then there are all those dollars held abroad. In some countries, the dollar is valued over the local currency for its stability and low inflation rate. In fact, the following countries have adopted the U.S. dollar as legal tender and abolished their own currency: British Virgin Islands, Caribbean Netherlands, East Timor, Ecuador, El Salvador, Marshall Islands, Federated States of Micronesia, Palau, Panama, and Turks and Caicos Islands. Many more countries use the U.S. dollar alongside their own currency, either formally or informally. In addition, in those countries where the banking system is underdeveloped or not trusted, savings can be held mostly in U.S. cash in freezers and mattresses. (Note that foreign currency reserves held by central banks are rarely cash: They’re mostly held in Treasury bonds or accounts at the Fed.)
How this graph was created: Search for “currency in circulation” and click on the monthly series. From the “Edit Graph” panel, add a monthly population series, and apply formula a/b*1000.
This FRED graph plots quarterly foreign direct investment (FDI) flows into the U.S. as a percent of GDP. And what is FDI? It’s the flow of capital across borders when a firm owns a company in another country. But it’s more than simply owning stock in a foreign company: It implies that the investor is directly involved in the foreign company’s day-to-day operations.
FDI is beneficial to job creation and a country’s growth. In the U.S., it began to pick up after 1975 and spiked in the late-1990s and early 2000s, corresponding with the tech bubble. During recessions, which are represented in the graph by shaded bars, FDI systematically falls. Since the Great Recession, average FDI flows have been higher than in previous decades, ranging from 1% to 2% of GDP each quarter.
How this graph was created: Search for and select “Rest of the world; foreign direct investment in U.S.; asset, flow series (ROWFDIQ027S).” From the “Edit Graph” panel, use the customize data option to add the nominal quarterly GDP series (GDP). In the formula box, type ((a/1000)/b)*100 and click “Apply.”
In 1922, the Federal Reserve Board began offering its industrial production index, with data starting in January 1919—which means we now have 100 years of data!
This series has been extremely useful in helping us gauge the state of the economy: At first, industrial production was basically the only data series available before the computation of GDP; and the data are published more frequently and quickly than GDP data. The disadvantage is that industrial production doesn’t encompass the entire U.S. economy. In fact, it has encompassed less and less as the economy has matured into primarily a service economy.
